No products in the cart.

Why revalue assets and liabilities at …

CBSE, JEE, NEET, CUET

CBSE, JEE, NEET, CUET

Question Bank, Mock Tests, Exam Papers

NCERT Solutions, Sample Papers, Notes, Videos

Why revalue assets and liabilities at the time of admission
  • 3 answers

Shivam Goyal 5 years ago

I can explain this with an example....Suppose there are two partners A and B with assets as "Land Rs. 10,000(Book value)". They agreed to admit C as a partner on July 10 . They did not revaluate their assets at market value. On july 11 the Partnership firm was dissolved and the land realised Rs.50,000. And the profit of 40,000 ( 50,000-10000) would be distributed among all the three partners including C. And hence C gained a part of profit which was earned by A and B, as the value of Land is increased when A and B were the only partners. To prevent this loss of profit to A and B , revaluation of assets and liabilities was necessary at the time of admission of C. If revaluation was done on July 10, then the profit of increased value of land Rs.40000 would be distributed among A and B only.This is the reason that revaluation is done on admission/retirement of partner.

Nancy Sundrani 5 years ago

It is necessary to revalue assets and liabilities of a firm in case of admission of a partner so that the incoming partner is neither put to an advantage nor to disadvantage due to change in the market value of assets and liabilities.
Because of reconstitute of partnership firm
http://mycbseguide.com/examin8/

Related Questions

Rac ds1 solution
  • 0 answers
Rspl 1 accounts solutions
  • 0 answers

myCBSEguide App

myCBSEguide

Trusted by 1 Crore+ Students

Test Generator

Test Generator

Create papers online. It's FREE.

CUET Mock Tests

CUET Mock Tests

75,000+ questions to practice only on myCBSEguide app

Download myCBSEguide App